HELENA — Yesterday the Montana Environmental Information Center (MEIC) filed a legal challenge in state court charging the Montana Public Service Commission (PSC) and NorthWestern Energy with violating a state law that encourages local renewable energy projects in Montana.

Filed in Cascade County district court, MEIC is defending the Community Renewable Energy Projects law. By state law, NorthWestern must acquire at least 65 megawatts of renewable energy from Montana-based projects. By way of comparison, NorthWestern Energy’s Ryan Dam—about 10 miles downstream from Great Falls, Montana on the Missouri River—has a total generating capacity of 60 megawatts. NorthWestern’s interest in the Colstrip coal-fired power plant amounts to 222 megawatts.

Unfortunately, NorthWestern has never complied with its obligation to purchase Montana-owned renewable energy. Instead, since 2012, the first year compliance was required, NorthWestern has relied on the PSC to issue annual waivers to avoid either complying with the law or its shareholders having to pay a penalty. MEIC is challenging the PSC’s decision to grant waivers for 2015 and 2016, the most recent years in which NorthWestern requested waivers from the Commission.

“Community renewable energy projects would create jobs, tax revenue, economic diversification, and clean energy for communities across Montana. These benefits are precisely why the legislature created this program in 2005 and it is unfortunate to see the PSC and NorthWestern undermine them,” said MEIC’s Clean Energy Program Director Brian Fadie.

The Commission’s staff had identified a number of reasonable measures NorthWestern could have taken to help the company comply. Under the law, NorthWestern’s failure to take those steps made it ineligible for a compliance waiver. Nevertheless, the Commission voted to issue the waiver for both years on a 3-2 vote. One of two commissioners who dissented from the Commission’s decision charged that granting the waivers for years 2015 and 2016 would effectively nullify the legal requirement to purchase Montana-owned renewable energy.

NorthWestern again failed to comply with its legal obligation to purchase Montana-owned renewable energy in 2017.

The state law in question – Montana’s Renewable Power Production and Rural Economic Development Act – calls for a penalty for failing to meet the act’s requirements. PSC staff calculated the penalty to be about $1.2 million for each year of noncompliance. Proceeds from the penalty go to the universal low-income energy assistance fund. The penalty costs may not be passed on to NorthWestern customers.